Correlation Between Old Point and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Old Point and Waterstone Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Old Point and Waterstone Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Point Financial and Waterstone Financial, you can compare the effects of market volatilities on Old Point and Waterstone Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Old Point with a short position of Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and Waterstone Financial.
Diversification Opportunities for Old Point and Waterstone Financial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Old and Waterstone is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial and Old Point is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Old Point Financial are associated (or correlated) with Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Old Point i.e., Old Point and Waterstone Financial go up and down completely randomly.
Pair Corralation between Old Point and Waterstone Financial
Given the investment horizon of 90 days Old Point Financial is expected to generate 0.96 times more return on investment than Waterstone Financial. However, Old Point Financial is 1.04 times less risky than Waterstone Financial. It trades about 0.07 of its potential returns per unit of risk. Waterstone Financial is currently generating about 0.06 per unit of risk. If you would invest 1,629 in Old Point Financial on August 27, 2024 and sell it today you would earn a total of 536.00 from holding Old Point Financial or generate 32.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
Old Point Financial vs. Waterstone Financial
Performance |
| Timeline |
| Old Point Financial |
| Waterstone Financial |
Old Point and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Point and Waterstone Financial
The main advantage of trading using opposite Old Point and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Point position performs unexpectedly, Waterstone Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Waterstone Financial will offset losses from the drop in Waterstone Financial's long position.| Old Point vs. First Community | Old Point vs. Oak Valley Bancorp | Old Point vs. Chemung Financial Corp | Old Point vs. Home Bancorp |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |